I am interested in economics for about 4 months. When you are 30, you want to be more educated in finances. But then economics revealed to be a very amusing and useful discipline. Try “Freakonomics” and you’ll understand what I’m about. But the more I read, the more similarities I notice between economics and design. Especially when I heard about behavioral economics and nudges. So I wondered what designers can learn from economists in creating better products.
When economics and design collaborate
Is there something similar between economics and design? It’s hard to find it from the first look. Economics works with money, numbers, statistics. Design is about creativity, colors, emotions. But economics like design is aimed at improving people’s well-being. And both of them make sense only for humans. People have needs and economists study the best ways to meet these needs in conditions of limited resources. Sounds familiar to designers, eh? Change “people” to “users” and “economists” to “designers” and you’ll get the same sense.
Economics isn’t about money, it’s about making people’s lives better. Design isn’t about creating nice looking products, it’s about making people’s lives better. As experts at User Onboarding state — “People don’t buy products, they buy better versions of themselves”. Behavioral economics uses psychological and neurological principles to learn more about humans.
Design thinking methods are used in economics, education, health, business etc. As a creative problem-solving technique it’s not limited to creating a fancy interface. It learns what people need, what problems they face and how to find the best solution for it.
Economics and design both concentrate on making people’s lives better. So what can a designer learn from an economist?
Are your users rational?
There is a conception of a rational agent in economics — most people almost always make the choice that best suits their interests. But the reality is that people aren’t always so rational. We forget, make mistakes, we are lazy and often concerned.
Why does it happen? Because humans use two types of thinking — intuitive and reflective. Intuitive thinking is automatic, it’s quick and receives information from instincts. The reflective system is slow and self-conscious. It needs time and efforts to get involved. These systems don’t compete, they work in collaboration.
People are busy, life is difficult and thus they can not think and analyze everything. We use the automatic system most of the time in situations that don’t need their attention. Intuitive thinking operates with mental shortcuts or rules of thumbs because they work fast. These shortcuts are called heuristics and usually involve focusing on one aspect of a complex problem and ignoring others.
These rules work well under most circumstances, but they can lead to systematic deviations from logic and rational choice. The resulting errors are known as “cognitive biases”.
As a result, people make mistakes and irrational choices. We overemphasize personal characteristics and ignore situational factors. We interpret information in a way that confirms their views. We react to the same choice in different ways depending on how it is presented.
The worldview of humans is limited by the information available now, and thus they do not seem to be consistent and logical like rational users. And designers should reckon with it to build better products, find better solutions.
So people aren’t always rational and their choices aren’t perfect. How can economists and designer make life easier for people? Remember that your users are humans that face many choices every day. Build systems that take into account humans phycology. It’s called a choice architecture in behavioral economics.
Everyone who influences the others choices is a choice architect. Designers are choice architects. They are responsible for organizing the context in which users make decisions. People make better choices in contexts where they have more experience, enough information, and quick feedback.
Choice architects guide humans to the best variants using nudges. Nudges aren’t orders. They don’t influence people’s liberty or rights. They guide people to get the best, doing at least harm.
One of the most cited examples of a nudge is the image of a housefly placed in the men’s room urinal at Amsterdam’s Schiphol Airport. A small cheap plastic fly made toilets 80% cleaner without forcing or ordering. Only clear understanding of human phycology and behavior features.
Principles of a successful choice architecture
A great choice architecture consists of 6 basics.
Incentives move the people. Know your audience and use the right incentives to the right people. Fitness-tracker shows you the distance you walked today. But it also shows how many calories you burnt, what distance walked your friends, and it motivates you to be more active.
Humans usually face numerous choice that makes it hard to select the right one. A well-built system of choice architecture helps people to compare and choose the most useful variants. Transform quantitive indicators to the units people can understand the best. A good example of it is an electric kettle that shows the number of cups alongside with the liters units. 3 cups are more understandable to humans then 0,5 liters.
Humans are inert and choose the option of the least effort. If there is a default option, most people use it. Designers should remember it when creating good systems. Build the right defaults to help your users get the best of your product. A bad example of it is a cafeteria where you can select ingredients to make your own sandwich. But they offer too many ingredients you should select from. And it takes a lot of time for every consumer to analyze and select ingredients they like. A better solution is to create the predefined sets of the most popular sandwiches when keeping the ability to create your own one. You provide the liberty of choice but you make it easier to choose.
The best way to help people increase their efficiency is to provide a feedback. Feedback warns users if something goes wrong or might go wrong. As a result, it reduces numbers of errors and cognitive stress level. Medium and Google Docs show you a “Saved” badge so you can be sure that all your work is saved.
Humans make mistakes. A well thought out system is designed to ‘forgive’ users wherever possible. An example of it is a USB Type-C cable — no matter what side you put it, it works in both cases. Gmail checks if you made an attachment before you sending if you mentioned it in your letter.
Structure complex choices
When there are a lot of choices with different parameters, people use simplifying strategies. Keep it in mind when designing a system with complex choices. If you have three types of goods you can present them in any order. But if you have hundreds of them you should simplify the structure of choice. Netflix has a great choice architecture using recommendations and categories. Users can easily find the right show they’d like to watch.
Behavioral economics has a plenty of useful information that designers can use. Economics like design is aimed at improving people’s well-being. People aren’t always rational and their choices aren’t perfect. Economists and designers use choice architecture and nudges to make humans life better and easier.
Nudge: Improving Decisions About Health, Wealth, and Happiness by Richard H. Thaler, Cass Sunstein — https://www.amazon.com/Nudge-Improving-Decisions-Health-Happiness/dp/014311526X
Thinking, Fast and Slow by Daniel Kahneman — https://www.amazon.com/Thinking-Fast-Slow-Daniel-Kahneman/dp/0374533555
Note: Thanks to Vitaly for the contribution.